Business & Economy

Why an early Chinese New Year means more cargo for the Port of LA

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The earlier timing of Chinese New Year in 2014 helped usher in more cargo at the Port of Los Angeles in March, port officials said.

Container imports and exports at the Port of Los Angeles increased 34 percent to a total of 515,323 20-foot equivalent units in March, compared to a year ago, the port said. It's part of a trend that happens every year.

"We expect next year to be no different," said Gary Moore, interim executive director at the Port of Los Angeles. "When [Lunar New Year] happens, we'll expect to see a slow down in cargo and the next month, it will pick up again."

Chinese factories close during New Year

Lunar New Year is considered a national holiday in China, where workers are given about two weeks of time off, said Baizhu Chen, professor of clinical finance and business economics at USC Marshall School of Business. It's sort of like Thanksgiving and Christmas combined into one, he said.

He said many Chinese factory workers travel hundreds of thousands of miles to work in factories making shoes, clothes and toys and the importance of being with their family during the holiday is huge.

"These factory workers need to go home to be with the family during the Chinese New Year and so they will leave the factory and the factory effectively closes down during that time," Chen said.

Nearly 60 percent of total cargo volume at the Ports is related to China

Roughly 60 percent of all total cargo volume that goes through the Ports of L.A. and Long Beach is related to trade with China, said Ferdinando Guerra, an international economist at the Los Angeles County Economic Development Corporation. The data comes from a report Guerra will present on June 5th at the International Trade Outlook.

Guerra said he's not aware of any other holiday that has the same impact that Lunar New Year does on the Southern California ports. He said in addition of the timing of the New Year, overall improvements in the economy could have boosted the Port of L.A.'s cargo volumes.